11 Apr Belks Comps Rise in 2013
Belk, Inc., the nation’s largest family owned and operated fashion department store company, today announced operating results for the fiscal year ended February 1, 2014.
Tim Belk, chairman and chief executive officer of Belk, Inc., said, “Despite significant headwinds during the latter part of the year, we are pleased to report our fourth consecutive year of positive comparable store sales. Compared to recent years, fiscal 2014 was a challenging year with a shorter holiday selling season, and our earnings were impacted by additional expense associated with key strategic initiatives, such as expanded Omnichannel and eCommerce capabilities. We spent time last year testing ways to drive incremental sales through item locator and store fulfillment of digital orders, and we plan to expand those efforts this year.”
Net sales for the 52 weeks of fiscal 2014 totaled $4.04 billion, an increase of 2.1 percent, compared with net sales of $3.96 billion in the 53 weeks of fiscal 2013. On a comparable store basis, which included comparable 52-week periods this year and last, net sales for fiscal 2014 were up 2.9 percent.
Merchandise categories achieving the highest growth rate for the year include activewear; ladies contemporary, resort and bridge fashions; ladies suits; men’s better sportswear and clothing; and kids apparel and shoes.
The company’s online sales from belk.com increased 42.5 percent for fiscal 2014. Online sales positively affected the company’s comparable store sales by 1.5 percent for the period.
Net income for the period totaled $158.5 million compared to $188.4 million in the prior year. The decrease was primarily the result of a lower margin rate and higher expenses associated with the company’s investments in strategic initiatives during the period, including the launch of a new information technology (IT) platform that included a new merchandising system and the replacement of much of the company’s previous IT infrastructure. Net income excluding non-comparable items totaled $161.0 million in fiscal 2014 compared to $185.5 million in the prior year period. A reconciliation of net income to net income excluding non-comparable items is provided at the end of this release. (See attached PDF file.)
The company’s board of directors declared a regular dividend of $.80 per share for stockholders of record on March 26, 2014.
Belk Announces Stock Buyback
The board of directors announced approval of an offer to repurchase up to 2,080,000 shares of the company’s common stock at a price of $48.10 per share. The company expects to launch the repurchase offer on or about April 24, 2014.
Investments in Strategic Initiatives
Belk has planned investments totaling more than $700 million over a three-year period that began in fiscal 2014 for key strategic initiatives focused on:
- A comprehensive Omnichannel initiative that will enable Belk to connect seamlessly with customers regardless of where they are, offer multiple ways to provide what they want, enhance their in-store shopping experience, and create more personalized customer interactions;
- Creating compelling shopping environments and driving sales by investing in a flagship strategy, opening stores in existing and new markets, and expanding and remodeling existing stores and key merchandise departments;
- Supply chain initiatives that align distribution capabilities to maximize sales and service;
- Information technology that delivers new business capabilities for growth and profitability; and
- Excelling in customer service.
- New Stores, Store Expansions and Remodels
- Belk invested nearly $88 million in store expansion and remodeling projects last year, including the opening of a new store in New Braunfels, Texas, and relocations of stores in Salisbury and Morganton, N.C. to new centers. Store expansions and remodels were completed in Flowood, Miss., Rock Hill, S.C., Morehead City, N.C., Paragould, Ark., Tifton, Ga., Stuttgart, Ark., Brunswick, Ga., and Mount Pleasant, S.C. (phase 1 – new men’s store). Stores completing remodels included Fredericksburg, Va., Gainesville, Fla., Monroe, La., Bainbridge, Ga., Danville, Va., Elizabeth City, N.C., Griffin, Ga., Natchez, Miss. and Greenville, Miss.
The company will open its first Texas flagship store at Galleria Dallas in Dallas, Texas, on April 9, 2014, and relocated its High Point, N.C. store to a new center at The Palladium at Deep River Shopping Center on March 12. A second new flagship store is scheduled to open in fall 2014 at Bridge Street Town Centre in Huntsville, Ala., along with a new store at Denham Springs/Livingston Parish, La. Other flagship store expansion and remodeling projects set for completion this fall include Greensboro, N.C. (Friendly Center), Mt. Pleasant, S.C. (phase 2 main store remodel) and Hoover, Ala. (Riverchase Galleria). Belk has also announced the openings of two new stores in 2015 in Bristol, Tenn. (The Pinnacle) and Jacksonville, Fla. (Marketplace at the Fountains), along with a major expansion and remodel of its flagship store in Columbia, S.C. (Columbiana Centre).
eCommerce Fulfillment Center Expansion
In December, Belk announced the expansion of its eCommerce fulfillment center operations in Union County, S.C., to support its growing online business. The company invested approximately $9 million to up fit additional space at the 500,000-square-foot Jonesville facility last year and plans to invest another $32 million this year to further increase the center’s capacity. Belk expects to add approximately 170 new jobs by the end of 2015 in addition to the 124 jobs announced last year. Belk opened the center in 2012.
Private Brand Launches
Belk introduced three new brands during the past fiscal year – MADE Cam Newton, a modern menswear line; CYNTHIA Cynthia Rowley, an exclusive line of apparel, shoes and accessories designed by acclaimed fashion designer Cynthia Rowley; and Chip & Pepper® California, an exclusive line by denim experts Chip & Pepper Foster featuring trend-setting, premium denim. This spring, the company launched Crown & Ivy, an updated ladies better sportswear line in all locations.
Belk Investment in the Community
In addition to a focus on achieving business objectives, Belk maintains a rich legacy of giving back to the communities that have made its success possible. Each year, Belk gives 2.5 percent of its pretax income back to the communities it serves with a focus on education, breast cancer awareness and research, and community strengthening. In the fiscal year ended Feb. 1, 2014, the company and its associates, customers and vendors donated more than $20.9 million to those communities.
During fiscal 2014, in partnership with Charlotte Radiology and Foundation for the Carolinas, Belk announced a $6 million, multi-year investment in the Belk Gives on the Go Mobile Mammography Center. In 2014, the Center plans to visit more than 100 Southern cities, delivering breast cancer screenings and spreading awareness across the South. As of the fiscal 2014 year end, the Center had screened more than 4,500 women.
Modern. Southern. Music.
Belk has launched a year of celebrations and special events in 2014, including a Southern musician showcase competition and a concert sweepstakes, that will pay homage to pop country, Americana, blues, jazz and bluegrass music. Award winning actress Hayden Panettiere, best known for her roles in “Nashville” and “Heroes,” will serve as ambassador for the Belk brand during the campaign through ads, special appearances and promoting Belk via social media.
Charlotte, N.C.-based Belk, Inc. (www.belk.com) is the nation’s largest family owned and operated department store company with 300 Belk stores located in 16 Southern states and a growing digital presence.